Holzmann, who also heads the Austrian Central Bank, said that it is possible that inflation in the euro zone will reach the central bank's target of 2 percent within the next two years, but the path will be difficult.
During this month, the European Central Bank kept interest rates unchanged at the level of 4 percent on deposits, for the second meeting in a row, and the head of the bank, Christine Lagarde, said at the time that monetary policy members had not yet discussed reducing interest rates.
The European Central Bank said in its statement about the interest rate decision on December 14, “While inflation has declined in recent months, it is likely to rise again temporarily in the near term.” Despite this, the European Central Bank expected inflation to gradually decline during 2024, “before it approaches its target of 2 percent in 2025.”
Last November, the inflation rate in the euro zone slowed more than expected, approaching the 2 percent target, as investors increased their bets that the European Central Bank would cut interest rates sooner than officials indicated.
Inflation reached 2.4 percent in November on an annual basis – down from 2.9 percent in October. Price pressures continued to decline in almost all categories, and remained at their lowest levels in two years, according to Bloomberg.
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